Short Duration Fixed Income:
New Environment,
New Opportunities

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Guy Haselmann Scott Pavlak
FEB 28, 2023

Explore Strategies

Public Fixed Income


Guy Haselmann, Head of Thought Leadership at MetLife Investment Management, recently sat down with Scott Pavlak, Head of Short Duration Fixed Income, to discuss interest rates and the investment landscape in short duration bonds.

Guy: What a difference a year makes. The risk-free rate was effectively near 0% less than one year ago and real yields were negative. The Federal Reserve has now raised official rates by 450 basis points so far, changing the investment landscape dramatically. Before we dive into what this means for the investment opportunity set, let’s begin with how you define a “Short Duration” portfolio.

Scott: Our definition of short duration covers fixed income portfolios that have an average duration range of half a year running out to 2 ½ years. Depending upon which of our short duration strategies we are discussing, the maximum duration of any individual security will be either 3, 5 or 7 years. Importantly, the sectors and securities in which we invest are in some of the most liquid areas of the fixed income market, which is important because there can be unanticipated liquidity needs that have to be met in some instances.